Please help me to run a numbers for a deal (loan, HOA, rent)

Buying & Selling Real Estate
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Please help me to run a numbers for a deal (loan, HOA, rent)

Artur A.
Member since 2019 · 22 posts · 0 votes

I'm planning to buy a property in the Bay Area (Danville, Concord, Richmond area). If something happens in my life and I would need to move out after some time.

I'm trying to calculate all numbers, that rent will cover monthly payments.

I used this mortgage calculator:

https://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

Create a spreadsheet where I put all info (property tax, prop management fee, etc) 

https://docs.google.com/spread...

Please correct me If I missed something. In the case of 20 years loan, monthly payments would be able to cover all expenses. What would you include as well? 

Thanks in advance

    1    
Downpayment 48000
Loan192000
Condo (2 bath, 1 bedroom)240000
Monthly paymentLoan amountPrincipal and Interest
Rent per month 2300
Property management (Comission 8%, Vacancy rate 8%)184
20 years loan - Monthly Payment (HOA, Prop Tax, Interest)1809240000267120
15 years loan - Monthly Payment (HOA, Prop Tax, Interest)2068240000202320
Property tax (Concord - 0.871%)174.2
Insurance (Lemonade)25
HOA fees500
Principal and Interest (15 years)1124
Principal and Interest (20 years)1113
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  • Dylan ThomasPro Member
    Rental Property Investor · PA · Member since 2019 · 63 posts · 57 votes
    6y

    @Artur Abdullin

    I’d suggest running all these numbers in the bigger pockets calculators. It’s a step by step process that’s hard to mess up. You get 5 of them for free!

    Put them to good use and good luck!

    0Reply
  • Anthony Dooley
    Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
    6y

    I think you would make more money in the stock market with an average performing mutual fund and with less headaches. 

    0Reply
  • Artur A.
    OP
    Member since 2019 · 22 posts · 0 votes
    6y

    @Anthony Dooley

    @Anthony Dooley

    0Reply
  • Anthony Dooley
    Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Artur A.:

    @Anthony Dooley

    @Anthony Dooley

    There are no numbers to calculate when buying a personal residence. It doesn't make money. If you have to move, then sell it. Buying a residence and buying an investment property are completely different.

    0Reply
  • Bryan S.
    Rental Property Investor · CA · Member since 2018 · 225 posts · 180 votes
    6y

    @Artur Abdullin I would keep in mind in altho you can avoid the California state wide rent control law as a single investor, some cities still have their own rent control laws and Richmond is one of them. Plus, El Cerrito is much nicer.

    0Reply
  • Dave DeMarinis
    Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
    6y

    @Artur A. you are wise to consider multiple exit strategies even for an owner occupied home. I think you meant to include PM at 8% + Vacancy at 8% which makes sense so you are missing $184. Common items you left out are Repairs & Maintenance and CapX reserves. By being in a condo association, you should have some advantages if they are responsible for external items (roof, driveway/parking lot, etc.) but you will still have internal items. 

    Note you will also benefit from the Principal pay down happening each month - which will get more substantial in the future (check the amortization table on your bank rate sheet). If you can benefit from the depreciation, that will also be another benefit. 

    Whether or not you should sell in the future or rent (when the move might happen) that depends on the market rents and value at that point of course.

    0Reply
  • Artur A.
    OP
    Member since 2019 · 22 posts · 0 votes
    6y

    @Dave DeMarinis Thanks, Dave. Preventative maintenance and Vacancy rate are both calculated from Monthly rent? If it is a Condo with HOA fees $400 per month?

    0Reply
  • Dave DeMarinis
    Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
    6y

    @Artur A. I’m not sure of your question. Vacancy should be a % of rent. Maintenance is often a % of rent but you have to sanity check it without much things cost. 

    EXAMPLE: A simple plumber clearing a clogged drain is going to cost the same for $600, $1500 and even $5000 per month probably. Maybe a small variation for regional (plumbers in San Francisco probably make (and charge) more than plumbers in Cleveland)

    Regarding CAPX and Maintenance - you can adjust lower because of the HOA responsibilities.
    EXAMPLE: HOA maintains the roof so you will never have to replace the roof out of your CAPX ... They mow the grass/plow the parking lot, so you will not need landscaping/snow removal in your maintenance.
    Also note, the % of purchase price as depreciation cost basis is generally higher with condos. This means if you can take advantage of depreciation, it will have extra benefit to you.

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